For the last week or so FTX and Sam Bankman-Fried have been the center of tons of rumors about bailouts and acquisitions of other crypto companies in trouble. At one point it was even rumored that FTX was going to just buy BlockFi for only $25 million an unimaginable price just months ago. Finally, we have clarity on what is going on and what type of agreement has been reached between FTX and BlockFi. 

The deal includes $400 million in revolving credit facility for BlockFi and the option for FTX to buy out the lending for at most $240 million. At the end of last year, BlockFi was worth an estimated $5 billion so when with the "better" price the evaluation has completely tanked this year. For FTX if the market stabilizes and BlockFi is able to get out of the hole that it is in this could be a huge deal where they acquire an asset for pennies on the dollar. As a private company, the company's financials are not public knowledge however the company has previously stated that it was cash-flow positive as recent as May of 2022. 

With FTX making the moves that it was I was wondering who the next mover would be when it came to bailing out a troubled lender or exchange. Personally, I figured we would see either Coinbase or Binance involved bailing out someone or outright purchasing them but so far neither has been in the headline about doing this. When I saw the news that it was Nexo that was making the next move publicly to acquire someone I was taken back to say the least. 

For those of you who have not heard Nexo has already signed a term sheet with Vauld (who I had previously written about and has both Peter Thiel and Coinbase Ventures as investors) giving Nexo an exclusive 60 days window to explore the acquisition of the company. The more I thought about it though the more this really did make more sense. Nexo has stayed out of the headlines over recent months when it has come to solvency and they previously had offered rates that were much lower than offered by others like Celsius Network. Instead of chasing other lenders Nexo so far has played the slow and steady game and therefore has been able to handle a huge decrease in crypto assets as we have seen. 

Acquiring Vauld would give Nexo exposure to a new marketplace that they do not currently have in Southeast Asia and India. This makes it a lot more enticing to the company compared to other lenders since they would not be competing for any of their current clients and instead would be gaining new growth. Nexo has tried to acquire at least one other lender, Celcius Network, but the offer they submitted was rejected by the company and Celcius is still in a state of limbo. 

Consolidation is important for the crypto/blockchain industry and with the current market downturn the time for this to occur. With that in mind, we should all expect to see more and more of these stories and deals to transpire over the coming weeks and months as the stronger companies absorb the weaker and the industry overall matures. This is not something to worry about as every industry goes through a period of consolidation so that money is better allocated and spent. The result of which is a better stronger more mature industry.

Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

Robinhood

Robinhood is offering a great signup deal if you use my link here where we will both be awarded free stock. All that you have to do is sign up and connect your bank account for the award! With commission-free crypto trading and the ability to set limit orders, it is a great hybrid offering in my opinion! Not to forget the addition of wallets and the ability to send and receive crypto!

Fold App

Offers daily wheel spins to win free sats daily! If you sign up for Fold with my link here you will get 5,000 sats for free!  

Unstoppable Domains

Sign up using my link here and get a free $10 credit towards your first $40+ purchase! 

Coinbase

Sign up for Coinbase and earn $10 of free Bitcoin when you buy or sell $100 in crypto with my referral here!

SMiles

If you are like me and walk to work every day this app rewards your walking with Sats! So far I have earned over 6,000 sats in just a couple of months walking to work! Here is my link!